(January 6, 2015) 2014 has to rank as the year where everything has gone wrong for Agriculture Minister Gerry Ritz and his followers. They promised an era of transparency, freedom, competition, profitability, and efficiency for western Canada’s grain farms hitherto never seen.
EVOLUTION DENIED
What Ritz and his cohorts regarded as stuffy bastions of red tape like the Canadian Wheat Board, the Canadian Grain Commission and many other institutions involved in quality assurance, customer relations, and plant breeding were either swept away or changed beyond recognition. Those who understood these organizations had evolved over the decades to protect farmers and asked for evidence and intelligent analyses of these revolutionary changes were ignored.
FLIPPING REPLACES MARKETING
The 2013/14 crop year was supposed to be when the unregulated marketplace showed its mettle and western farmers prospered. However, the result has been a catastrophe for western grain farmers. Our wheat prices fell by half while the world market stayed steady. From the beginning of the crop year the private railways ran at about 98% capacity moving massive volumes of grain to port yet unprecedented numbers of grain ships waited and customers complained because the private elevator companies were not inclined to get the right grain to the right place at the right time. As many of us warned, the private trade’s only interest is flipping the grain for their profit and the devil takes the rest. Which is just what has happened and now Canadian wheat has gone from premium quality grain to being the cheapest in the world.
There was also the extraordinary phenomena of a Minister of the Crown characterizing those who questioned him and warned of this mess as “part of the tin foil hat crowd.”
FARMERS’ SHARE FALLS
The year has also seen the determination of Ottawa to ignore the implications of this great grain debacle. The numbers are plain that in the first half of the crop year, on number two CWRS wheat alone the grain companies took an extra $1.6 billion out of western farmers’ pockets. The percentage change is even more startling. Based on the audited numbers from the previous Wheat Board compared to the actual numbers of the private trade as reported by Minister Ritz’s own Wheat Board, the farmers’ share of the international price of grain has fallen from just over 90% to around 40%. The prediction is that as smaller Canadian grain handling companies are swallowed up, the western farmers’ share will drop to 20%. Little wonder then that Minister Ritz has refused to table an audited statement for his crippled Wheat Board with any numbers in it.
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HOW BIG IS THE RIP OFF ON NON-BOARD GRAINS?
Given this astounding change of fortune for wheat growers, it can be extrapolated the numbers for canola are equally as unfair. Certainly this gives further credibility to those who pointed out the systematic rip off of canola farmers by the unregulated private system and attempted a few years ago to get the industry captured Canola Commissions to address the problem.
GO BIG AND GO BROKE
2014 also saw the playing out of another phenomenon that is cyclical on the prairies – the rise and fall of the mega-farm. Each time the system is either not regulated, as in the 1880s, or deregulated, as in the 1920s and now, some come to the conclusion that if they can only achieve large enough economies of scale, they can prosper growing wheat on the Canadian prairies. 2014 saw the collapse of several of these optimistic operations. As is historically typical, they lasted just long enough for investors to realize that there are as many dis-economies of scale in farming as there are economies.
LAMBS TO THE SLAUGHTER
If Minister Ritz and his followers had not done so much damage and created so much long term misery, I could almost feel sorry for them. However, seeing so many of his followers on various farmer-funded but industry captured Astroturf groups sitting with the industry representatives who have so recently been freed by Ottawa to take all they can from farmers makes his followers look gullible at best. Minister Ritz’s accolades on these Astroturf groups may think the lamb can lay down with the lion, but as one wag observed “the lamb will not get much sleep.”
Next time, looking forward to 2015 – sort of
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